Idaho Health Exchange Board Keeping Secret Findings Of $15G Taxpayer-Funded Investigation Into No-Bid Contract

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This Oct. 21, 2013 photo shows the U.S. government Internet health insurance exchange HealthCare.gov. (credit: KAREN BLEIER/AFP/Getty Images)

This Oct. 21, 2013 photo shows the U.S. government Internet health insurance exchange HealthCare.gov. (credit: KAREN BLEIER/AFP/Getty Images)

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BOISE, Idaho (AP) — Board members of the Idaho health insurance exchange said Tuesday that they will keep secret the findings of a $15,000 taxpayer-funded investigation into how one of its own members won a lucrative no-bid contract.

Your Health Idaho board chairman Stephen Weeg said the two-week-long review by a private lawyer uncovered “lapses in judgment,” though nothing illegal. Exchange executive director Amy Dowd last month awarded a technology contract worth up to $375,000 to board member Frank Chan, who quit the same day the contract was announced.

Dowd gave Chan the contract without advertising it or allowing others to compete. It was later canceled after House Speaker Scott Bedke, R-Oakley, joined critics who called Dowd’s deal with an exchange insider “indefensible.”

Boise lawyer Frederick Mack was hired to scrutinize the deal. He presented his report Tuesday during a three-hour, closed-door exchange board meeting at the Idaho Capitol.

“The key finding was: We violated no law, that lapses of judgment were made around the procurement policy and conflict-of-interest policy,” Weeg said following the meeting. “He had recommendations for us to move forward as an organization.”

Dowd said Tuesday that she thinks the recommendations will help staff and board members make good decisions in the future.

“I’m very much looking forward to focusing all of our attention now on moving ahead,” she said.

But Weeg said the public will never be able to see Mack’s recommendations or findings.

“It deals with personnel, and it’s done under attorney-client privilege,” said Weeg, a retired Pocatello health care industry executive who heads up the volunteer board. He declined to detail the judgment lapses Mack found or who committed them.

“The key is, how do we move forward, rather than how do we point fingers,” he said. “Sure, we stumbled. But we want to minimize the number of stumbles.”

Dowd maintains that she vetted Chan’s hiring with Gov. C.L. “Butch” Otter’s staff before making the move.

While Otter’s staff knew Chan was quitting the board to take the contract, the governor’s aides say they never approved Dowd’s decision to award him the work.

“Our role was not to approve or deny her requests,” said Jon Hanian, Otter’s spokesman, responding to questions about the administration’s role. “Our understanding was that any potential contract would be reviewed by the board, which has that authority.”

Idaho’s online exchange is part of President Barack Obama’s program to provide federally subsidized health insurance to more Americans.

Like exchanges across the country, Idaho’s version has struggled to enroll participants, in part because of glitches in the federal software system seen since its launch Oct. 1.

The $180-per-hour deal Dowd struck with Chan on Oct. 16 was to oversee Idaho’s effort to replace the federal software with a program of its own. The deal came without board approval.

The 18-member panel has since curtailed Dowd’s powers to award contracts without its approval. The board also updated rules preventing members from capitalizing on their ties to win exchange-related work.

Despite these distractions, Dowd said Tuesday that she doesn’t believe there’s been a delay in the goal of having Idaho’s in-house enrollment system completed by next October.

To complete that project, Idaho aims to use a pending $50 million federal grant, on top of a $20 million grant the exchange has already received.

Also Tuesday, exchange board members created a new “personnel committee” that, among other things, plans to address questions like appropriate compensation. That will subject Dowd, who earns $175,000 annually for her role heading the exchange, to additional scrutiny.

Much of the new committee’s work, like Mack’s investigation, will be also kept from public view, Weeg said, given the board’s need to protect employee confidentiality.

(© Copyright 2013 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

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